How the governor pushed this nonprofit funding program through the budget impasse - Generocity Philly

Funding

Jan. 4, 2016 12:27 pm

How the governor pushed this nonprofit funding program through the budget impasse

Letters of approval validating millions in funding for nonprofits across Pennsylvania were issued "at the last possible moment."

Governor Wolf allowed EITC credits to go at the "last possible moment."

(Photo by Flickr user Governor Tom Wolf, used under a Creative Commons license)

The new year brings good tidings.

Millions of dollars are being delivered to the doorsteps of education nonprofits across Pennsylvania. But as recently as a week ago, those funds weren’t a sure bet.

We don’t know yet how much money was generated through the state’s Educational Improvement Tax Credit program — Pennsylvania’s Department of Community & Economic Development said last year’s EITC donations alone equaled $32.9 million — but we do know the nonprofits that rely on those funds are now receiving them.

First, let’s rewind.

The EITC program allows businesses to donate to nonprofits through the state and receive up to 90 percent of their donations back in tax credits. The program was recently held hostage in the state budget impasse: Letters approving the credits had to be issued by the state before Dec. 31.

On Dec. 24, Governor Tom Wolf allowed the letters to be sent as “conditional approvals,” subject to the passage of a state budget — and it happened at the “last possible moment,” according to Children’s Scholarship Fund Philadelphia Executive Director Ina Lipman. That means for five days, some nonprofits were in receipt of life-sustaining funds that would have been rendered invalid if a budget didn’t pass by the new year.

When Wolf used partial line-item veto power to release some educational funding on Dec. 29, those letters of approval became legitimate. The Children’s Scholarship Fund alone is expecting $7 million through the program. In just four days, Lipman said the nonprofit has already received $2.5 million.

Still, some lawmakers and nonprofit leaders across the state are wondering why the tax credit program was held up in the state budget impasse in the first place.

“Our position has always been this was not an appropriation that came from revenue,” Lipman said. She believes that the program should not be reliant upon the state budget — that it should be pulled out of the political crossfire of budget talks. The Wolf administration has said the tax credit cap for the program is set in the state tax code, which cannot be approved without a final budget.

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